San Francisco office rent is more expensive than Manhattan's for the first time in over a decade

San Francisco's booming tech market has driven up the
city's housing prices to unprecedented levels. Now it's
made the office rent price in San Francisco the most expensive in
the country, too.

According to
a New York Times report on Friday, San Francisco's average
office rent price was $72.26 a square foot in the fourth quarter
of last year, up 14% from the previous year, narrowly beating
Manhattan's $71.85-a-square-foot price to top the country.

The report, which cited data from the CBRE Group, said it
was the first time since the dot-com boom era of the early 2000s
that San Francisco's office rent price surpassed that of
Manhattan.

The change is due in large part to the tech sector's exponential
growth in recent years, as nearly one-third of all office space
in San Francisco is occupied by tech companies, The Times' report
said. Salesforce, Twitter, Dropbox, Adobe, Google, and
Squareare
amongthe largest tech tenants in the city, each
with more than 300,000 square feet of leased space.

“The market here in San Francisco has been largely
driven by the tech industry, which has really been one of the
growth leaders coming out of the
recession,” Colin Yasukochi, CBRE's director of
research and analysis, told The New York Times.

The result isn't too surprising considering that San
Francisco and its surrounding Bay Area already have some of
the most expensive housing prices in the country. San
Francisco recorded the highest one-bedroom median rent in the
country in January, while Oakland and San Jose each came in
at fourth and fifth highest, respectively,
according
to online rental firm Zumper.

Zumper

But it's unclear how much longer the bullish real-estate
market will continue in San Francisco. There have been signs of
multiple tech startups based in San Francisco facing layoffs and
cost cuts, and the funding environment to back these companies
is also expected to cool down a bit this year.

Plus, some landlords
are reportedly avoiding tech startups as tenants in
order to diversify their portfolio and mitigate risks associated
with the startups' short financial history. Some
landlords also expect an economic downturn looming in the
coming years.